Welcome to The Deduction, Big Bird Accounting LLC’s weekly newsletter (written by Christopher Small, the founder). My goal here is simple – logical insights to save on taxes. Need help – let’s chat – https://bigbirdaccounting.com/contact

Happy Sunday! One of the cool things about doing the books for a lot of other business owners is I get to see not just how much money they are making and where they spend it (which I honestly don’t pay a ton of attention to – you do you), I also get to see how they set up their money system. What do I mean by that? I’m talking about your money flow. And, wouldn’t you know it, most people are HIGHLY disorganized. Money flowing back and forth. Deposits into multiple accounts. It’s not purposeful (the inconsistencies), and that lack of purpose creates chaos and uncertainty. So, this week I want to encourage you to organize your money FLOW. How? Great question. Here’s what I do. I have two main business accounts – an income account and an expense account. As you might guess, ALL of my income goes into the income account, where it accumulates until it’s time to do something with it. That time, for me, is bi-monthly when I run payroll. At that time, I open my bank and transfer from the income to the expense account what I need to pay payroll and all the other bills I have, plus have a cushion just in case. So, it’s a one-time transfer, twice a month. Simple. Clean. Easy to execute. If there is extra, it just stays in the income account. Then, once a quarter, I open the income account and distribute the excess (i.e. the profit) to two places: (1) a “tax” account for paying income taxes – usually 20% of the profit; and (2) out to my personal account to be invested. Again, simple, clean, and easy to execute. And doesn’t take a lot of math. If you want to make progress with your money game, establish clear, easy rules you can execute consistently. Next thing you know, you’re rich! Have a great week! Cheers, Christopher Small Big Bird Accounting LLC PS – we love referrals, so if you have law firm owner friends looking for help with books and tax strategy, let them know about us!